Solana welcomes Circle’s cross-chain transfer protocol

Cryptocurrency

Solana welcomes Circle’s cross-chain transfer protocol – Crypto News

Published

2 years ago

March 31, 2024

Dripp

Circle, the issuer of popular stablecoin USDC, has partnered with Solana to bring its cross-chain transfer protocol (CCTP) to its blockchain ecosystem.

CCTP is designed by Circle to enable the secure transfer of USDC between different blockchain ecosystems using the native mint and burn process.

This means that Solana developers can now natively swap USDC tokens from Ethereum and other EVM-compatible ecosystems, including Arbitrum, Avalanche, Base, Optimism and Polygon. It will also be compatible with non-EVM blockchains as well.

CCTP first integrated with a non-EVM chain in October last year, when it partnered with Noble, a Cosmos-based token protocol, to bring USDC natively into the Cosmos ecosystem. As Noble itself is integrated with Cosmos’ inter-blockchain communication protocol (IBC), CCTP is also functionally compatible with all Cosmos chains that are connected with IBC.

A handful of Solana ecosystem players will support CCTP from day one. This includes Wormhole, Allbridge, Mayan Finance, Drift Protocol, Sphere Labs, Cube Exchange, Jupiter Exchange, Solend Protocol, and others. Additional ecosystem projects are expected to go live in the following weeks.

Bridging protocols such as the CCTP are important in the on-chain environment. They enable blockchain networks — which normally operate in siloed environments — to communicate with one another, enabling the transfer of digital assets across various ecosystems.

Traditional bridging solutions often come with a handful of drawbacks, such as introducing additional trust assumptions and requiring its users to pay significant gas fees.

As CCTP is designed by Circle, the issuer of USDC, the protocol may be preferred over third-party bridges, especially when transferring the stablecoin across different ecosystems.

Following the announcement of CCTP’s launch of Solana, there has been little price action. The price of SOL, the native token of the Solana blockchain, has remained relatively stable, trading at $190.4 at the time of writing.

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